Crisis Theory

Capitalist Crisis of Overproduction

The disruption of the process of production, which occurs periodically in capitalism, because the toilers cannot buy the commodities produced by their labor. Crises are inevitable because of the fundamental contradiction of capitalism - social production but private appropriation. "The ultimate cause of all real crises is the private appropriation. "The ultimate cause of all real crises is the poverty and restricted consumption of the masses as compared with the tendency of capitalist production to develop the productive forces in such a way that only the absolute consuming power of society would be their limit" (Marx)."Modern bourgeois society, with its relations of production, of exchange and of property, a society that has conjured up such gigantic means of production and exchange, is like the sorcerer, who is no longer able to control the powers of the nether world whom he has called up by his spells. For many a decade past the history of industry and commerce is but the history of the revolt of modern productive forces against modern conditions of production, against the property relations that are the conditions for the existence of the bourgeoisie and of its rule. It is enough to mention the commercial crises that by their return put the existence of the entire bourgeois society on trial, each time more threateningly. In these crises a great part, not only of the existing products, but also the previously created productive forces are periodically destroyed. In these crises there breaks out an epidemic that, in all other epochs, would have seemed an absurdity - the epidemic of over-production. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed. And why? Because there is too much civilization, too much industry, too much commerce. The productive forces at the disposal of society no longer tend to further the development of the conditions of bourgeois property; on the contrary, they have become too powerful for these conditions, by which they are fettered, and as soon as they overcome these fetters they bring disorder into the whole of bourgeois society, endanger the conditions of existence of bourgeois property. The conditions of bourgeois society are too narrow to comprise the wealth created by them. And how does the bourgeoisie get over these crises? On the one hand, by enforced destruction of a mass of production forces; on the other by the conquest of new markets and by the more thorough exploitation of the old one; that is to say, by paving the way for more extensive and more destructive crises and by diminishing the means whereby crises are prevented" (Manifesto of the Communist Party).